Betterment Cash Reserve | High-yield cash account (2024)

FAQs

Is Betterment cash reserve a high-yield savings account? ›

Top perks. Competitive APY: Betterment Cash Reserve's APY of 5.00% is significantly higher than the national average and in line with the best high-yield savings accounts.

As easy as it is to withdraw money from a high-yield savings account, there may be limits to the number of withdrawals allowed per month or year. Going over that limit can incur extra fees. Some banks may even close the account if the withdrawals become excessive and don't meet the terms set by the bank.

Limited growth. While you can grow your money with a high-yield savings account, it's not the best way to generate long-term wealth for retirement because the yield often doesn't keep up with inflation. As a result, working with a broker or robo-advisor to develop an investment portfolio is better for long-range plans.

You can withdraw your money from Betterment at any time, without additional fees. We do not charge any trading fees or assess penalties for requested withdrawals or account closures. It's your money and is always accessible to you.

While high-yield savings accounts offer higher interest rates than traditional savings accounts, they may not outpace inflation, potentially eroding your purchasing power over time. As a result, they're not typically recommended for long-term wealth-building or retirement savings.

Myth 1: Your money is stuck in a savings account

Savings accounts are designed to keep your funds liquid, meaning you can access your money anytime. This is what makes savings accounts — and high-yield savings accounts especially — such a good choice for keeping your emergency fund.

As long as you're banking with an FDIC-protected bank, you're not risking losing your money when you deposit it into a high-yield savings account. However, the rate of inflation can be higher than your APY, resulting in a negative real return, or the return after taxes and inflation are taken into account.

What are the disadvantages of a high-yield savings account? Some disadvantages of a high-yield savings account include few withdrawal options, limitations on how many monthly withdrawals you can make, and no access to a branch network if you need it. But for most people, these aren't major issues.

Millionaires Like High-Yield Savings, but Not as Much as Other Accounts. Usually offering significantly more interest than a traditional savings account, high-yield savings accounts have blown up in popularity among everyone, including millionaires.

If you deposit $1,000 into a high-yield savings account with a 4.5% APY, you'll earn just over $45 in interest after one year. At 5% APY, you'd earn about $51. If you deposit $1,000 into a high-yield savings account with a 4.5% APY at age 20, you'll earn almost $6,100 in interest by age 65.

What happens if you put 50000 in a high-yield savings account? ›

If you deposit $50,000 into a traditional savings account with a 0.46%, you'll earn just $230 in total interest after one year. But if you deposit that amount into a high-yield savings account with a 5.32% APY,* your one-year interest soars to over $2,660.

Once you have funds in your account, interest will be compounded according to your bank's compounding schedule. Earned interest will then be deposited into your account, typically on a monthly basis.

Yes, Betterment is legit. It is registered and regulated by the SEC and FINRA, like traditional investment advisors and brokers. Betterment also invests in considerable safety measures for its users. Betterment has over 850,000 users and $45 billion in assets under management.

Interest will be paid into your account by the first business day of each month, unless that day is a bank holiday, then it will be paid by the following business day.

Our checking services are provided by nbkc bank. If you already have funds at nbkc bank or another nbkc bank partner separately from what you hold through Betterment Checking, you will be eligible for up to $250,000 per depositor, per FDIC-insured bank, per ownership category.

Betterment Cash Reserve offers a solid annual percentage yield with no fees and no minimum balance requirement. Betterment Checking has a debit card available and reimburses ATM fees worldwide. This account also has no monthly fees or minimum balance requirement.

While a cash reserve and savings account may sound similar, they represent different things. A cash reserve is money that you set aside for emergencies, whereas a savings account is a bank account that holds money, often for a variety of purposes.

Many people store money in a savings account, but some accounts offer a much higher return than others. That's where high-yield savings accounts (HYSAs) come in. While the average return on a traditional savings account is just 0.46%, some HYSAs offer rates over 5%.